Markets salute euro zone deal on Greece
Tuesday, 13 April 2010
LONDON, April 12 (Reuters): Financial markets Monday saluted a euro zone deal on a huge standby rescue package for Greece, slashing the debt-laden country's borrowing costs and buying its stocks and bonds.
But doubts remained about whether the weakest of the single European currency's 16 members would use the bailout fund and if it would be able to manage its 300 billion euro debt mountain over the longer term.
The yield on short-dated Greek government bonds fell by over a point to around 5.9 per cent and the cost of insuring Greek debt against default narrowed dramatically from Friday's close as markets digested the bigger-than-expected EU rescue plan.
The yield on its 12-month T-bill GR1401111YT= came down even more sharply, dipping some 268 basis points to 5.28 per cent, normalising a yield curve that had inverted last week to suggest the threat of a near-term default had been lifted.
But doubts remained about whether the weakest of the single European currency's 16 members would use the bailout fund and if it would be able to manage its 300 billion euro debt mountain over the longer term.
The yield on short-dated Greek government bonds fell by over a point to around 5.9 per cent and the cost of insuring Greek debt against default narrowed dramatically from Friday's close as markets digested the bigger-than-expected EU rescue plan.
The yield on its 12-month T-bill GR1401111YT= came down even more sharply, dipping some 268 basis points to 5.28 per cent, normalising a yield curve that had inverted last week to suggest the threat of a near-term default had been lifted.